February | 2024 | Offshore Companies International

Where To set Up a Non-Licensed Forex Brokerage Company Offshore

For the longest time entrepreneurs wanting to set up Forex etc broker businesses without the risk of regulatory arbitrage looked to the Caribbean Island state of St Vincent & the Grenadine (“SVG”) as their preferred incorporation centre.

But with the SVG having declared Forex Broker business as a prohibited activity we are regularly asked “Where can I set up a Forex Brokerage Business Offshore without having to apply for a Special License”.

The answer is the shimmering island jewel of St Lucia!

The St Lucia FSA boldly advertise that “Forex trading activities are not licensed in St Lucia”. As such there is no reason at Law for why a St Lucia Company could not be deployed to own/operate a Forex Brokerage Business.

History

St Lucia is a peaceful idyllic tropical island state in the Caribbean Sea south of Barbados with a population of 180,000. Its primary Industries are Tourism Financial Services and Agriculture.

Following the arrival of Europeans in the 1600s multiple battles for ownership/control over the island were fought between the French and the English before British sovereignty finally prevailed in the late 18th century. St Lucia achieved independence from Great Britain in 1979 but retains the English/Westminster system of law and governance.

St Lucia offers an International Business Company (“IBC”) product which can be deployed to own and operate an (unlicensed) Forex Broker business.

Key features of the St Lucia IBC Legislation include:

• Ownership information is not publicly accessible

• Directors details are not publicly accessible

• Disclosure is only possible to specified authorities in accordance with specific legislation.

• There is no Local director requirement for local directors

• Meetings of directors can be held anywhere.

• Shares can be issued without par value.

• No requirement to file Annual/Tax returns with the St Lucia Govt

• Well established network of locally licensed “Offshore” Banks

• Accounts do not have to be audited

AND, since 2021, St Lucia has declared it has a Territorial Tax system meaning Corporate/Trading income sourced from outside of St Lucia should not be taxable in St Lucia.

At OCI we believe in giving you more for your money than would the average IBC formation service. Hence included in the incorporation package for your Samoan Company is the following:

Services:

• Unlimited name availability inquiries

• Advice from an experienced International Corporate Lawyer on how to structure your company

• Preparation (overseen by a lawyer) of application to incorporate the company

• Preparation (overseen by a lawyer) of the company’s memorandum of association

• Preparation (overseen by a lawyer) of the company’s articles of association

• Attending to filing incorporation request with the company registry

• Attending to payment of government filing fees

• One year’s Registered Agent service in the country of incorporation

• One year’s Registered Office service in the country of incorporation

• Mailing address in the country of incorporation

• Delivery of Incorp pack by international courier (ie DHL/Fedex/TNT etc)

• Unlimited free legal consultations for 12 months

Documents included in your Incorp pack:

• Certificate of incorporation

• 2 sealed/stamped copies of the company’s Memorandum of Association

• 2 sealed/stamped copies of the company’s Articles of Association

• Resolution appointing first director/s

• Resolution appointing first shareholder/s

• Up to 5 share certificates

• Resolution to open a bank account

• Resolution to rent an office

• Resolution/s to engage a Phone, Internet & Website service provider

• Resolution to hire a staff member/s

• Resolution to appoint a company lawyer

• Resolution to appoint a company accountant

• Resolution appointing you as the company’s authorised representative in commercial negotiations

• Resolution issuing a Power of Attorney in your favour

• Agreement authorising you to represent the company in commercial negotiations

• Power of attorney authorising you to sign documents on behalf of the company

• Register of directors

• Register of shareholders

• Expression of wishes (ie an “Offshore” Will)

• Lawyer authored User Guide (“How to Use Your Offshore Company”)

Price (all inclusive): $US 1,400

With tax effective offshore company management (ie including Professional Corporate “Nominee” Director, Shareholder & Company Secretary): + $800

From 2nd year $US $US1,350 (+ nominees if required)

Would you like to know more? Then please Contact Us:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

Best Offshore Jurisdictions For Trading Bitcoin?

With the price of Bitcoin having surged by over 100% in the past 12 months (perhaps not surprisingly) we are seeing an upsurge of interest in Cryptocurrency Trading.

Cryptocurrency Trading is an activity which lends itself well to an Offshore Corporate Structuring Plan. Here’s how:

You set up a zero tax Offshore Company/International Business Company (“IBC”) with a nil tax jurisdiction based “Nominee” Director
The IBC opens an account with a Cryptocurrency Exchange/s
You are appointed as the IBC’s Authorised Trader or Trading Manager (ie you are given the power place the buy and sell orders on behalf of the company)
All Exchange Account agreements would be accepted/signed/closed “Offshore” by the Company under the hand or by the authority of the Director
You as the IBC’s Authorised Trader or Trading Manager go ahead and place buy orders & sell orders on the Company’s Exchange Account
Periodically the Board of Directors meet to review and ratify (ie approve retrospectively) trades made in the previous period by the Authorised Trader/Trading Manager
The Director sits in (& is seen to be managing/controlling the Company from) a nil tax jurisdiction.
On any objective assessment it is clear that trading profits arise from decisions made by the Company Director ie in a nil tax environment.
When you need some living/spending money the IBC pays you a wage, or consulting fees or a commission (eg a percentage of trading profits generated)
That living/spending money can be paid to your local bank account (which means it would be assessable income wherever you are tax resident though you should also be able to claim a sizeable amount of allowable deductions eg for home office, car, equipment, insurances, travel, stationary etc etc to reduce the amount of your “taxable” income at home)
If you don’t want the vultures to know how much money you are earning by way of wages/commissions you could use an anonymous ATM or Debit/VISA card to withdraw your wages/commissions from an Auto Tele Machine. That said, (unless this is reimbursement for expenses incurred by you in working for the IBC) technically these receipts should be declared
The majority of trading profits could be reinvested Offshore potentially tax free.

Where to incorporate?

If ease of set up/maintenance and/or ownership privacy are priorities and/or if you’re on a budget you might want to think about incorporating your Company in a Privacy Haven ie somewhere which (i) does NOT have a public register of directors, shareholders or owners & (ii) which does not require any local presence. Most people in that position choose to incorporate in either:

Nevis – For detailed information click on this link: http://offshoreincorporate.com/st-kitts-and-nevis-offshore-companies/ ; or
Seychelles – For detailed information click on this link: http://offshoreincorporate.com/seychelles-offshore-companies/; or
Belize – For detailed information click on this link: https://offshoreincorporate.com/belize-offshore-companies/

Cost there would be:

For a Belize IBC Company, including incorporation, registered/agent office service and one year’s basic admin: $US1,000. 2^nd and subsequent years $690
For a Nevis Company, including incorporation, registered/agent office service and one year’s basic admin: $1,400. 2^nd and subsequent years $1,350
For a Seychelles Company, including incorporation, registered/agent office service and one year’s basic admin: $720 2^nd and subsequent years $575

Belize also offers an (Asset Protection focussed) LLC product. Check this link for details.

https://offshoreincorporate.com/belize-offshore-companies/

Other low cost and/or low maintenance and/or private and/or potentially nil tax jurisdictions worth considering include:

Panama – For detailed information (including pricing info) Check this link: https://offshoreincorporate.com/panama-offshore-companies/
Samoa – For detailed information (including pricing info) Check this link: https://offshoreincorporate.com/samoa-international-business-companies/
St Vincent – For detailed information (including pricing info) Check this link: https://offshoreincorporate.com/saint-vincent-and-the-grenadines-svg-companies/
The BVI – For detailed information (including pricing info) Check this Link: https://offshoreincorporate.com/products-services/offshore-companies/bvi-tax-free-ibcs/
Hong Kong – For detailed information (including pricing info) Check this link: https://offshoreincorporate.com/hong-kong-companies/

(Sadly Nevis has recently declared Cryptocurrency Trading a prohibited activity so you won’t be able to incorporate a Crypto Trading Company there!)

You may be interested to know that the most popular place to incorporate a (potentially) tax-free Offshore Company is Hong Kong. Check this link which explains why it’s so popular: https://offshoreincorporate.com/why-incorporate-in-hong-kong/

If you’re looking for ease of maintenance you might want to take a close look at Samoa which has the simplest Account Keeping requirements (Check this link for details: https://offshoreincorporate.com/where-to-set-up-an-offshore-company-with-no-accounting-requirements/ )

Would you like to know more? Then please Contact Us:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com

Can one Foundation Work or do Partners Each Need Separate Foundations?

Are you looking to incorporate a Joint Venture (“JV”) Offshore with a business partner?

Certainly, in many cases, there are a lot of benefits in incorporating a JV Offshore (Check this previous article which explains why: https://offshoreincorporate.com/how-to-set-up-a-joint-venture-tax-free-offshore/ )

So what entity are you going to use to hold your/your partners shares in the JV Company?

If you are looking to incorporate a Joint Venture Offshore – and you’ve done your research – then you’d know that the best possible holding entity is most likely a Private Foundation.

Why?

Because unlike a Trust (or a Holding Company) a Private Foundation is presumed at law to be both the legal owner AND the beneficial owner of any asset it holds. This can get you around CFC rules and, when combined with Offshore Management, (ie where Management & Control of the Company is seen to be taking place from Offshore – which can potentially be achieved via deployment of a nil tax jurisdiction based “Nominee’ Director) can lead to a result whereby you may only have to declare and pay taxes locally on profits/income actually received by you from the Company.

In a joint venture scenario (ie where 2 parties are coming together to form a Trading or Investment Company), whilst shares could potentially be held in each partner’s personal name, ideally each partner should set up/have his/her own holding entity.

Your holding entity is your alter ego, ie it will hold your shares in the JV Company.

Ideally, for tax planning reasons, your holding entity would be incorporated in a nil tax jurisdiction.

That entity could be a Company or it could be a Foundation (or it could be a Company owned by a Foundation).

The latter scenario is commonly deployed by clients who want to have options in terms of how they might go about selling their interests in the JV Company. For example (depending on where the JV Company is incorporated) it might be cheaper in items of stamp duty for somebody wanting to buy your shares in the JV Company to acquire your Holding Company instead. Plus, it would be cleaner and easier for you to sell a Company than to sell a Foundation.

Assuming your business partner is also tax resident in a jurisdiction that has a CFC law he/she will certainly want to have a Foundation at the bottom of his/her family/ownership tree.

Could you just set up one Foundation to begin with to hold both your shares in the JV Company?

Potentially you could do that, but it could get really messy. One would assume you’d both be nominated as beneficiaries of the Foundation. But the problem there is, unlike say a Unit Trust, beneficiaries in a Foundation do NOT have separately divisible/recognizable interests. If there’s only one Foundation but with 2 business partners as beneficiaries you can’t say with any clarity “Hey I am the beneficial owner of X% of the JV Company”. And you’d face big problems should you and your partner decide to split in a scenario where one partner decides he wants to continue the JV Company. If there’s only 1 Foundation owing the JV Company how do you value the exiting partners interests in the JV Company?

Usually Private Foundations are deployed as Family asset holding vehicles, one per Partner/Family. Like a Family Trust. (Eg Our typical client is a 50 year old + plus career entrepreneur with a spouse and kids. Usually, he/she sets up a Foundation and nominates himself his spouse and children as beneficiaries of the Foundation).

To summarize, when two parties are coming together to form a JV Company (and in particular where both partners are based in a country which has CFC rules) ultimately each partner ideally should set up/have his/her own Foundation.

And where 2 Foundations are formed to own the issued shares in a JV Company its always prudent for each Foundation/partner to agree on and sign off on a Shareholder’s Agreement (like a Pre-nuptial agreement for business partners!).

Would you like to know more? Then please Contact Us:

www.offshoreincorporate.com

info@offshorecompaniesinternational.com